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Consumer spending boosts American Express Q3 bottom line

American Express Co. reported third-quarter net income attributable to common shareholders of $1.72 billion, or $2.08 per share, up from $1.62 billion, or $1.88 per share, in the year-ago period.

Adjusted EPS also grew year over year to $2.08 from $1.88. The S&P Global Market Intelligence consensus normalized EPS estimate for the quarter was $2.02.

The payment processor giant reported total revenues net of interest expense of $10.99 billion, an 8% increase from $10.14 billion in the same period last year. The company credited higher card member spending, net interest income and card fees for its revenue growth in the quarter.

Global consumer services group revenues grew 11% year over year to $6.0 billion, global commercial services revenues increased 7% to $3.4 billion, and global merchant and network services revenues posted a 5% increase to $1.7 billion. American Express credited revenue growth in all three segments to higher card member spending.

Total noninterest revenues grew year over year to $8.79 billion from $8.18 billion, with discount revenues increasing to $6.57 billion from $6.18 billion and net card fees surging to $1.03 billion from $870 million. Interest on loans grew on a year-over-year basis to $2.89 billion from $2.55 billion, which helped net interest income to increase to $2.20 billion from $1.96 billion.

Total expenses, however, also grew on a year-over-year basis to $7.84 billion from $7.21 billion.

Provisions for losses increased year over year to $879 million from $817 million, with the increases attributed to higher net write-offs and delinquencies.

American Express affirmed its full-year 2019 GAAP EPS outlook range of $7.64 to $8.14 and adjusted EPS outlook of between $7.85 and $8.35. The company expects a net impact to EPS of 21 cents related to a first-quarter litigation charge. Analysts polled by S&P Global Market Intelligence forecasts the company to report full-year EPS of $8.10.